June 27, 2024
Reliance Jio, India's leading telecom operator, announced on Thursday a tariff hike ranging from 12% to 25% on its prepaid and postpaid plans. This is the first increase in prices in two and a half years. The new plans are set to come into effect from July 3.
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The most active plan, which offers 28 days of validity with 1.5 GB of data per day, saw the sharpest hike. Another popular plan with a validity of 84 days saw a 20% increase from its previous price of ₹799.
This announcement follows Jio's recent acquisition of 14.4 MHz of spectrum in the 1800 MHz band for ₹973 crore in the just-concluded auction. The spectrum auction, held on June 26, saw telecom service providers purchasing over ₹11,300 crore worth of radio waves, which is just 12% of the ₹96,238 crore minimum value estimated by the government.
Experts suggest that the telecom sector is set to witness an eventful second half of the year, with the impending tariff hikes and potential 5G monetisation among other expected developments. Bharti Airtel and Vodafone Idea are also anticipated to follow suit with their tariff hikes.
The last hike in telecom tariffs was in December 2021, when rates were increased by 20%. Prashant Singhal, a telecom expert, mentioned in an interview with CNBC-TV18 that a 20-25% increase should occur within a year. He noted that the current tariffs are unsustainable given the high data consumption and potential misuse of free 5G speeds.
Market expert Prakash Diwan stated that the hike had been expected for a while and that the market would take it well. "After the election and the spectrum auction, we were more certain about it; it was just a matter of time.
But interestingly, they have done a hike of 20% on average, 25% for some of the higher plans, and that is a good move because most of us were anticipating 25% across two hikes. Now, if this first hike itself is 20%, it sets the pace for something higher in the next six to nine months. And once this pace of hikes and the quantum of tariff hikes starts getting accepted by the market, this will become organic. Of course, as consumers we will pay for it, but everybody goes home happy.